Understanding the IPO Allotment Process
Why didn’t you get the IPO shares you applied for? Here’s how allotment works, especially when an IPO is oversubscribed.
On this page
Applying for an IPO doesn’t guarantee you’ll get shares. The allotment process — especially when demand is high — decides who gets what. Here’s how it works.
The categories
An IPO’s shares are split across investor categories, each with its own quota:
- Retail (small individual investors),
- QIBs (institutions), and
- NIIs/HNIs (non-institutional).
Each category’s allotment is handled separately.
Bidding and cut-off
Retail investors usually bid at the cut-off price (agreeing to the final issue price) via UPI/ASBA, which blocks the funds until allotment.
What happens when it’s oversubscribed
If an IPO is oversubscribed (more demand than shares), not everyone can get shares:
- Retail allotment is by lottery — SEBI mandates that every retail applicant has an equal chance at the minimum lot, rather than big applicants getting proportionally more. So applying for more lots doesn’t improve your odds of some allotment (though it affects larger-lot chances).
- Heavily oversubscribed issues mean many applicants get nothing — their blocked funds are released.
After allotment
- Allotted → shares credited to your demat before listing; blocked funds adjusted.
- Not allotted → the ASBA block is lifted and your money is freed.
- You can check status on the registrar’s site.
The takeaway
For a popular IPO, allotment is partly luck. Apply at cut-off, ensure your UPI mandate is approved, and don’t over-apply expecting certainty. See how to apply for an IPO. Education only, not a recommendation.
